Marusan Securities Co., Ltd.

The proportion of stock brokerage commissions in operating revenue for the current fiscal year is high at 33.5% (28.2% in the previous fiscal year), resulting in a structure where business performance is significantly affected by stock market fluctuations. As a countermeasure, the Company aims to move away from a revenue structure dependent on trading commissions and establish a revenue structure based on balance-linked compensation.

There is a risk that the prices of held securities and other assets will fluctuate due to changes in stock prices, interest rates, and exchange rates. As of the end of the current fiscal year, trading products and investment securities accounted for 19.9% of total assets (19.0% at the end of the previous fiscal year), and sharp market fluctuations could impact net assets and other financial metrics. The Company conducts transactions within the market risk limits set by the Board of Directors and has established a system to measure and report risk every business day.

There is a risk of incurring losses due to failures in internet trading systems or in-house computer systems, and depending on the scale of the failure, this could significantly impact business performance and other outcomes. As a countermeasure, the Company has established a backup center, geographically separated, for the core system outsourced to an external vendor, thereby maintaining a system that allows business continuity even in the event of a data center failure.

If information held by the Company is leaked due to human error by officers and employees or unauthorized external access, or if systems or data become unusable due to a cyberattack, this could significantly impact business performance and other outcomes. The Company strives to reduce this risk through the development of an Information Security Policy and internal regulations, technical cybersecurity measures, security checks on outsourcing partners, and internal education and awareness activities.

There is a risk of penalties, damages, or loss of social credibility resulting from violations of laws and regulations, breaches of contract, or acts contrary to stakeholder expectations, and if such risks materialize, they could significantly impact business performance and other outcomes. The Company has established a legal response framework through the development of internal regulations including the Compliance Principles, internal education and awareness activities, and collaboration with legal counsel.

There is a risk of incurring losses when clerical processing is not executed accurately due to negligence or accidents by officers and employees, and if a significant clerical error occurs, this could significantly impact business performance and other outcomes. The Company strives for accurate clerical execution through the development of internal regulations, inspection of clerical processing status, and clerical guidance.

There is a risk of incurring physical damage due to disasters such as major earthquakes, large-scale wind and flood damage, or terrorism, and if a large-scale disaster occurs, this could significantly impact business performance and other outcomes. The Company has formulated a Business Continuity Plan (BCP) and conducts regular training to establish an appropriate response system in the event of such risks.

There is a risk of incurring losses due to an inability to secure necessary funds or being forced to raise funds at significantly high interest rates, and if this risk materializes, it could significantly impact fundraising and financial condition. The Company maintains liquidity on hand mainly through fundraising centered on its own capital, and conducts regular stress tests to recognize and evaluate this risk.

There is a risk of incurring losses due to the departure of key personnel, a shortage of successors, misconduct, harassment, or deteriorating health, and if such risks materialize, they could significantly impact business operations and social credibility. The Company strives to reduce this risk by improving employee working conditions, working to discover and develop next-generation talent, and conducting training on ethics and human rights.